Buying a property in foreign country might seem like a daunting and a complicated process, but we in Lexlau Properties are committed to make it as easy and understandable as possible.
Compared to other European countries, buying a property in Spain might take some time as bureaucratic processes move quite slowly in this part of the world. One should take into account that on average the purchase takes about 6-8 week to complete. If all the documentation is in order and the buyer for example already has an NIE number, the process might be faster, but we always recommend anticipating a slow process rather than a quick one.
Talking about extra costs – bear in mind that the prices in real estate adverts do not reflect the actual final price. 10-13% needs to be added to the final price because of the high transmission tax in Spain and other administrative procedures. Scrolling down you will find a real-life example of all the costs related to buying and selling a property in Spain.
Foreign companies can purchase properties in Spain similarly to private persons. As it is the case with private persons, companies need to obtain a tax number in Spain. To get a tax number, the company has to be legally and lawfully registered in the country of origin and all the documents proving it, need to be translated to Spanish and apostilled. Our local lawyer will help you go through the whole process.
As at the moment we are living in very confusing times, we offer video tours to your selected properties. If you have chosen the right property for you and cannot come to Spain anytime soon, please let us know and we can you a live tour or a previously recorded video of your dream property.
So, let us move on to how the actual process looks like.
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Choosing the right property. There is a lot of real estate for sale in Costa Blanca and Costa Calida in all sorts of price range. The price depends a lot on the location of the property, the further you are from the coast, the cheaper the price of a square meter. For example, an apartment in a coastal town of Guardamar Del Segura, can cost you 200 000€, but 15 kilometers away from the coast with the same size and quality apartment, can cost only 50 000€.
What we recommend bearing in mind while choosing the right property:
- Location, location, location – Is it important for you to quietly enjoy or vacation or do you like that bustling music and crowded streets? Is the distance from the beach really that important, if you always rent a car or have your own private pool? Would you like to live in so called “real Spain” or somewhere where there are a lot of foreigners like you? Is public transport important to you?
- Heating and cooling systems. Yes, you read it correct. To live comfortably in Spain during winter, a good heating system is absolutely necessary. Houses in Spain are generally built from thin red bricks and older houses do not have any isolation. This means that even though Spanish winters in our region tend to be quite warm and sunny with 20 degrees even during January and February, without heating, the indoors are a lot colder than outside. A proper isolation and heating system also helps with humidity that is quite high in winter.
- Community – not only apartments, but bungalows, detached and attached houses have communities that form an urbanization, which typically have their own community pools, playgrounds, picnic areas, sometimes gyms etc. The sumptuous the community areas are, the higher the community payments. For example some communities even have a monthly fee of 150€ that has to be paid every month even when you spend only a few months in a year in your property.
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Once you have chosen your dream property, it is time to put an offer in to the seller. When it comes to secondhand properties, it is common practice to haggle the price down a bit. If the seller accepts the offer, it is time to pay the deposit (usually starting from 3000€). The deposit is generally paid to a lawyer or a real estate agency who is the mediator of the sale. This is put to a separate account and is a signal to the seller, that buyer is being serious. After it is paid, the property will be taken off the market. Sometimes it is necessary to pay a couple of deposits, usually when for some reason the buyer delays the process or if the property is worth a lot of money. The general rule is, that if the buyer cuts the deal before finalizing, the deposit will stay as a compensation for the seller, if the seller backs down, then he must return it with an interest.
NB! If a mortgage is necessary for buying a property, you must have money for the deposit beforehand.
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Hiring a lawyer. It is always absolutely recommended to hire a lawyer for selling and purchasing a property. A lawyer guides you in every step of the way and has answers to all the possible questions you might have about buying and owning a property in Spain. It is important that the lawyer checks that the state of the real estate reflects the same way in the most important document related to the property – the “escritura” meaning a long document that includes all important information about the real estate – and that there are no embargos, mortgages or debts that could cause problems in the future. The solicitor also changes the water- and electricity contracts and confirms the change of ownership in the local tax office and in the land register.
In addition, the lawyer can help with applying for the NIE number, opening a bank account, drafting a will and other transactions related to real estate. Here we have a team of lawyers that we can always recommend to our buyers that offer services in English, Russian, German, Spanish and Estonian.
In case a mortgage is necessary, then after the seller accepts the offer and a deposit is paid, the next step would be to negotiate with the local banks. Depending on if the property will be a habitual residence or just a holiday home, the conditions of the loans are different. The general rule is that the maximum loan amount is 70% for nonresidents (investment properties or holiday homes). Residents can get a mortgage for up to 80% and in some cases even 100%. We collaborate mortgage brokers and can get you the best terms for your loan.
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A lot of people typically give their lawyer full representation rights with power of attorney to accelerate the process if it is impossible for the buyer to be in Spain at the moment of signing the title deeds. If you have given the rights for your lawyer, there really is not a lot more for you to do then just transfer money to your Spanish bank account, wait for the purchase to go through, collect your new keys and enjoy your new property. If you have not granted power of attorney, you have to go with the lawyer to different offices and be present at the Notary on the day of signing.
When the transaction is done and change of ownership confirmed, the lawyer will change all the utility contract, if there is no lawyer, buyers must do it themselves.
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Enjoy your new dream property in Spain!
